Volkswagen is in India for the long haul, and the German automobile behemoth has just made one more announcement that underscores its commitment to the Indian car market. Volkswagen has announced that it has invested 240 crore rupees towards setting up a diesel engine assembly line and an engine testing facility at its Chakan factory, with both facilities to become operational by the end of 2014.
This move from Volkswagen will result in an increased localisation of components on its mass market cars such as te Polo hatchback and the Vento sedan. The first engine to be assembled in India will be the 1.5 liter TDI turbo diesel motor, which recently made its debut on the facelifted Polo.
The engine has been designed keeping the Indian car market’s excise regulations in mind. The new assembly line has also resulted in 260 direct jobs at Volkswagen Chakan, and an increase in the number of jobs in its supply chain is also expected. The new line can assemble 98,000 engines in a three-shift system at full capacity. Diesel engines other than the one found in the Polo are expected to make their way to the assembly line in future.
Mahesh Kodumudi, Group Chief Representative, Volkswagen Group India and President and Managing Director, Volkswagen India Private Limited has noted,
“Our investment in this state-of-the-art engine assembly line which incorporates a sophisticated and full-fledged engine testing facility at our Pune Plant in Chakan is the next important step in strengthening our commitment towards India. With this, we take a significant leap towards enhancing our localisation in India.”
Increased localisation has always been associated with a decrease in prices and a lower cost of maintenance. Expect both the Polo and the Vento Diesels to become more affordable from the end of this year. Also, the cost of maintenance of the diesel variants is expected to drop significantly.